Global Climate Negotiations: Possibilities and Pitfalls

Thank you very much. It is a pleasure to be here. I always enjoy visiting Israel as my daughter and one and a half grandchildren live here. So when I was invited to come and speak it took me exactly one second to say “yes.”

But of course I am here to talk about climate change, and how the governments of the world are responding to it. Given the consensus among scientists on this issue, as well as the clear evidence that the planet already is warming and that this warming, as it continues, will present a clear and present danger to human societies and the natural world, you might expect that the governments of the world would be a little further along in their response.

But alas, they are not. And in my remarks here today, I want to talk about where we are in the negotiating process, why we have not seen more progress, and what our priorities should be as we look ahead to the next major international climate meeting in Cancun later this year, and beyond.

As the title of my remarks suggests, I see in the global climate negotiations both “possibilities and pitfalls,” and I want to explore these with you today. But before I do that, I want to step back and say a few words about some of this year’s events that place 2010 in the history books of extreme weather.

For me and my colleagues working to develop effective, practical policy solutions for climate change, it’s important to remember why, exactly, we do it. It helps to get some perspective by looking at real-world events and impacts that are already taking place and that we are likely to face more often in a warming world.

According to the U.S. government’s National Oceanic and Atmospheric Administration, the first eight months of 2010 tied the same period in 1998 for the warmest global temperatures on record. The average global land surface temperature for the June-to-August period was the warmest ever. 17 countries set record-high temperatures this year.

Among the consequences of the record heat this year were the deadly wildfires and severe drought we’ve seen in Russia – it is the worst drought in that country’s recorded history. We saw unprecedented high temperatures in Moscow and hundreds of wildfires burning out of control. Together, these events destroyed a quarter of Russia’s crops and prompted the government to ban grain exports for the remainder of this year.

Of course, it is not just in Russia where extreme weather caused problems. The flooding in Pakistan this year was the worst in that country’s history. Two million people are homeless, more than 6 million acres of cropland were flooded.

In the United States, while the effects of extreme weather haven’t been anywhere near what we’ve seen in Pakistan and Russia, we have had our share of summer heat. This was the fourth warmest summer on record for the U.S., and the warmest ever for many eastern U.S. states. Los Angeles had an all-time high of 113 degrees last month. And here in Israel, a heat wave early in the summer drove temperatures in Eliat to a staggering 122 degrees and sparked wildfires and record electricity use across the country.

Of course, no reputable scientist is going to link a single weather event – or the weather events of a single summer season or even a single year – to climate change. But the temperature increases and extreme weather events we are seeing are part of a clear trend.

Global temperatures are on the rise. And the heat waves, wildfires, drought and flooding we have seen this year are precisely the kinds of events that scientists have long told us we can expect to see more of as this trend continues. We are digging ourselves a very deep hole, one that will be even more difficult to get out of as the world continues to warm. Now we know what we need to do. the question is will we reduce emissions to a level that would keep climate change in check.

It’s a challenge that countries have been grappling with for nearly twenty years, and if we’ve learned nothing else – we’ve learned that striking a meaningful global deal on climate change is no easy task.

Now, before I get into detail about where we are globally on this issue, and what the prospects are for a global framework, you should know that I’ve always believed that honesty is the best policy. So I intend to be honest with all of you today and offer what I believe to be a realistic assessment of the state of climate action. Be forewarned: It’s not a rosy picture.

I am going to focus first on the two countries that are crucial to any global agreement, the United States and China, the world’s two largest emitters of greenhouse gases.

In the U.S, a step by step approach to national climate action is the only path forward. Continued economic struggles and political changes expected after the U.S. Congressional elections next month are likely to make advancing climate policy an even tougher fight than we experienced over the last two years. I think I speak for most of those working on this issue in Washington when I say the chances of passing a major climate bill in the next two years are nearly zero.

Does this mean we should simply wring our hands and wait in vain for U.S. lawmakers to come around on this issue? Of course not. Given Congress’s failure to act, the federal government actually has certain tools at its disposal to address this issue, and the marketplace has created two more. First, a Supreme Court ruling obligates the U.S. Environmental Protection Agency (or EPA) to regulate greenhouse gas emissions under the federal Clean Air Act. And the EPA is currently taking steps to use this authority in reasonable ways, by breaking the problem down into its component parts and developing rules covering emissions from various sectors of the economy such as transportation and electricity.. Of course, opponents will surely raise hell about all of this, and there will be loud cries in Congress to delay the regulations and even cut funding for the EPA … but the possibility remains that the agency could conceivably begin to chip away at the problem in the months and years ahead.

Second, other EPA rules, such as those dealing with hazardous air pollutants, will also have the effect of reducing emissions. For example, as many as one-third of all existing coal-fired power plants may be shut downby 2020 due, in large part, to EPA air pollution rules. And we also have put in place more stringent standards for automobile efficiency – now requiring 35.5 miles per gallon on average by 2016. And these standards are likely to become more stringent, increasing by 3 to 6 percent per year after 2016 – which means achieving up to 62 MPG by 2025.

Third, we have recently discovered large finds of shale gas, which we are beginning to see enter the marketplace at low prices. While this is not “the answer,” I believe most new power plants will be gas fired, and this will reduce emissions in the near term.

And finally, we have seen tremendous growth in the use of renewable energy, particularly wind. In the past several years, wind power has increased by more than 40 percent per year. Of course it is still a small portion of total energy generation, but it is growing, and growing quickly.

All of this suggests that U.S. emissions, which are now 2.5 percent below 2005 levels, will either hold steady or even continue to decline. But this is not something we can be sure of, and this has implications for our ability to agree to an international agreement with binding targets.

Now let me turn to China. A few years ago, China surpassed the United States as the world’s largest greenhouse gas emitter. This summer, it was announced by the IEA that China has also overtaken the U.S. as the world’s largest energy consumer. And Chinese energy demand is only expected to surge – by more than 100% over the next 25 years – more than what Europe and the Middle East combined use today. This means China is hugely influential in shaping our global energy future.

There’s also no getting around China’s reliance on coal, which makes up more than 60 percent of its energy supply. Therefore technological breakthroughs will be critical to reduce the climate impacts from burning coal in China, because remember – it doesn’t matter where the coal is burned – the effectsare global.

But clean energy presents emerging opportunities, and China is moving aggressively in that space. It outspent the United States nearly two-to-one in clean technology investments last year. Recently, the government announceda 10-year, $400 billion program aimed at solidifying its place as a global clean energy leader. Already, China is the world’s largest solar panel and wind turbine manufacturer, and now dominates the export market for renewable energy. More than 95 percent of its solar production is exported, while over 1 million workers and growing are employed in the renewable energy sector. This growth is not simply market-driven. It is the result of deliberate strategic choices backed by strong renewable energy policies and incentives.

China is also taking other steps at home. It has set very aggressive targets to improve energy efficiency, and progress on that front is now one of the criteria considered when relevant party officials undergo performance reviews. Its automotive fuel economy standards are tougher than those now in place in the United States. It has moved aggressively to shut down old, inefficient factories and power plants. And it is actively exploring the possibility of creating carbon markets to help bring down emissions.

Despite all this, as I’ve already noted, China’s greenhouse gas emissions continue to soar. And, when it comes to addressing this issue globally, China is not distinguishing itself as a leader. The Chinese have shown an aversion to being transparent about what they are doing, and subjecting their efforts to international review. Nor are they willing to accept any kind of binding commitment, or even allow the world to agree to a global emissions goal since that would have implications for their own emissions. So now, let me come directly to the subject of the international negotiations, and what can and cannot be done. I want to begin by saying clearly that there cannot be a binding international treaty without the United States and China, and neither are now able or willing to negotiate a meaningful binding agreement. This is not to say that some steps toward that objective are impossible, nor that we should abandon the negotiations. It is really to put our hopes into perspective, and allow us to take actions that will help us to get to that objective as soon as it is possible.

And this leads me to reflect on what was learned and achieved at last year’s Copenhagen climate summit.

First, we learned how much expectations matter. In Copenhagen, the nations of the world came together for the latest in a long series of international climate talks. Unfortunately, expectations going into the meeting were unrealistically high … The expectation created by many governments and others outside the process was that Copenhagen would produce the binding comprehensive agreement that had eluded us over so many years, even though a cold analysis made clear that that simply was not in the cards. Even apart from the immense uncertainty about the global economy, key players simply were not ready to take on binding commitments – including the United States and China. So when the summit instead produced a nonbinding political agreement, the Copenhagen Accord, it was viewed around the world as a failure. But when judged against more realistic expectations, I don’t believe Copenhagen was a failure.

I am not going to stand here and say this was a landmark agreement, but in its three short pages the Copenhagen Accord does plant the seeds for continued progress.

The document establishes a goal of limiting global warming to 2 degrees Celsius.

It calls for a balanced but differentiated approach to reducing emissions, with economy-wide targets for developed countries and quote-unquote “nationally appropriate” actions on the part of developing countries.

It reflects agreement in principle on how to verify that countries are meeting their commitments.

It sets clear targets for dramatically scaling up assistance to developing countries.

Finally, the Copenhagen Accord has served as a vehicle for eliciting quantified emission pledges from all of the world’s major economies. Mind you, these pledges are not legally binding. But this is the first time we’ve had explicit numbers from all of the major economies. That’s a big step.

To date, more than 130 nations have associated with the Copenhagen Accord, and 84 countries accounting for more than 80 percent of global emissions have identified specific targets or actions for reducing their emissions, including Israel. Collectively, these pledges fall far short of what’s needed to meet the Accord’s goal of limiting temperature rise to 2 degrees Celsius, but they are an important start.

That does not sound like failure to me, although we still have a long way to go. The true test of the Copenhagen Accord is whether the political understandings it contains can be translated into real action. I continue to believe that ultimately, we will be best served by a new treaty with ambitious binding commitments from all of the major economies. But we need to be honest – it’s going to take us time – a number of years – to get there. When we look at other international challenges – take trade, for instance – we see that strong multilateral systems aren’t created all at once. They’re built over time. And that’s what we need to do here.

Moving forward from Copenhagen, we need nuts-and-bolts decisions that begin to build out the climate framework. As the regime takes shape, and as countries move forward in implementing their pledges, we all will grow more confident – confident in the multilateral system, confident in our own ability to deliver action, and confident that others are acting too. As that confidence grows, it will become more realistic to think about transforming the multilateral regime into one with binding commitments.

So what does all this imply for the upcoming UN climate conference in Cancun? Thinking realistically – and I’m glad to say most parties do seem to be thinking more realistically this time around – the best plausible outcome in Cancun is a set of decisions on the broad architecture of the new institutions and mechanisms called for in the Copenhagen Accord, and a process for filling in the details.

To get agreement, this needs to be a balanced package – it needs to contain something for everyone. It should include a new mechanism to help the neediest vulnerable countries adapt to climate change. It should include a new mechanism to help promote the diffusion of climate-friendly technologies. And it should include a new mechanism to help build capacity in tropical countries to reduce deforestation.

But to be truly meaningful and balanced, I think the package must also include two additional elements. It must include steps to strengthen finance to developing countries. And it must include steps to strengthen transparency – steps toward a robust system of verification that will enable us to see whether countries are doing what they’ve promise to do. Those two issues, I believe, will be the crux of the deal in Cancun. So let me focus a bit more on them.

On the issue of finance, the Copenhagen Accord does three things. First, it sets a long-term goal of mobilizing $100 billion a year in public and private finance to help developing countries confront climate change. Second, it sets a near-term goal: $30 billion in fast-start finance between now and 2012. Most of those funds have now been pledged, and many developed countries are working hard to actually deliver on the ground, so we’re making some progress there. Third, the Copenhagen Accord called for the establishment of a new multilateral climate fund. That is where we need to see progress in Cancun.

Operationalizing a multilateral fund on the scale envisioned is no easy task. We need agreement on the basic structure of this new climate fund; its relationship to other financial institutions like the World Bank; and systems for tracking and verifying financial flows. We need clear guidelines about what types of projects can be financed with these monies, and there need to be systems for making sure that funded projects are delivering results. Many of these decisions will come later. In Cancun, we need agreement on some of the basic governance issues and a clear process to have the fund formally established as soon as possible.

On transparency, countries agreed three years ago in Bali that their mitigation actions – and that support for developing country actions – should be measurable, reportable and verifiable. The Copenhagen Accord took it a step further. It said developing country actions would undergo quote-unquote “international consultations and analysis.” These are all good words. In Cancun, governments need to decide what they mean. Here, too, we need agreement on the fundamentals and a process to fill in the details. We need agreement on what information countries must report, how frequently, and how it will be reviewed. We have a system in place already for reporting by developed countries, and other international regimes offer plenty of examples to draw from. So we’re not starting from scratch. We just need to move forward.

So far, I’ve focused strictly on the U.N. negotiations, and that is the right place, I believe, to continue strengthening the multilateral climate framework. But important international efforts also can and should be undertaken outside – or, more precisely, alongside – the U.N. process. One good example is the forestry partnership launched recently by the governments of Norway and France. It has brought together developed and developing countries to agree on approaches to reducing deforestation, and has begun to mobilize significant resources for those efforts. The hope is that the agreements reached within the partnership will be carried over into the negotiations and form the basis for a new forestry mechanism within the U.N. system. But if that doesn’t materialize, then the partnership can continue on its own.

I think it’s worth exploring whether it might be possible to organize similar coalitions of the willing in other areas – renewable energy, perhaps, or energy efficiency. We need to make progress on all of these fronts. Each of these efforts would be important in its own right, and each could contribute ultimately to the comprehensive binding deal we want.

I understand that gradual and incremental approaches like these can be hard to get excited about; this is hardly the stuff of rallying cries. But this must be our cause right now in the climate fight. It’s time to put one foot in front of the other and take the steps that will keep us on track to our ultimate destination: an effective global climate agreement.

As I reflect on the current state of affairs, I am reminded of the Woody Allen quote about relationships in the film Annie Hall. He said a relationship is like a shark. It has to keep moving forward or it dies. “And I think what we’ve got on our hands,” he told Annie as their relationship was falling apart, “is a dead shark.”

When it comes to moving forward to address global climate change, we are far from having a dead shark on our hands. There is a lot of good discussion on this issue leading up to the Cancun meeting in December, including at this conference. We are beginning to see activity that will reduce emissions in both the United States and China, as well as in the European Union, in Israel and elsewhere. This activity must continue.

And so now is the time to keep moving forward. Whether or not we can forge comprehensive solutions at the international or domestic levels is not the test of progress at this moment in time. Rather, the true test of progress is whether we can arrive at workable solutions that begin to add up to something bigger, and that bring new credibility and new support to the broader cause we are working towards, which is reduced emissions across the board and, ultimately, a safer global climate.

There are still plenty of pitfalls before us, but a great number of possibilities as well. We must do this, if not for ourselves, for our children and grandchildren.